You have heard that Bahrain is going to introduce VAT from January 2019, right? Actually, they have introduced it at a rate of 3-5% from the mid of 2018 itself and became the third GCC member state to introduce VAT. The minister of finance in Bahrain has appointed a tax authority to administer VAT. As a result of this, all companies have to register for Value-added tax and the authorities will take actions against the companies which have failed to do this.
Depending on local VAT regulations, VAT will vary for each GCC member state according to the place of supply. The majority of people have a lot of doubts about this like -
- When will be the VAT due
- Do we want to keep VAT invoice
- How can we do VAT return filing
- What is the threshold to register for VAT
VAT should be given before the supply of goods or services. We have to keep VAT invoices for at least 5 years from the year it was issued. But in the case of real estate properties, it should be kept for 15 years. The minimum VAT period is 1 month. Do you have a doubt that is there a threshold to register value-added tax? Yes, there is a threshold of BD 37,700.
What is VAT Return?A VAT return is a formal record statement of paid VAT for goods and services during a specific period. It can be paid on a quarterly basis and monthly basis. If you paid the VAT tax, then you can file the VAT return. VAT return is a proof of tax payment. Now you might be thinking of how to file this. Am I right? If so, continue reading this.
How to File VAT Return?VAT return filing in Bahrain is easy. There will be e-filing portal provided by the tax authorities. You can easily file VAT returns through this portal. Keep in mind that you can't file this in an offline mode. Don't feel that it is a hectic task because VAT return filing is very important. Through this filing only, you can inform the system about the VAT tax that you have paid. Actually, this filing method is a digitized way to store the details of taxes that you paid.
Hope now you might be aware of the importance of VAT and VAT return filing. Since all companies have to follow these rules, it will be better to try some VAT enabled ERP software like iCresp to manage your business efficiently. This software will be useful to reduce tax issues, accounting issues, penalties for VAT tax, manual data entry issues and so on.